AUGUSTA, Maine (Reuters) – As the pharmaceutical industry fights off a series of new FDA regulations that would limit the price of some medicines, companies are trying to keep up with the pace of the competition and improve quality.
A new study by researchers at the University of Maine shows that the pace is slowing down, and it’s not just because of the industry’s increased focus on pricing and innovation.
“The pace of innovation in the industry has slowed down, particularly in the area of pharmaceuticals,” said John Averill, a professor of pharmacy at U.S. Tufts Medical School and lead author of the study.
The study also showed that prices for drugs that can be purchased in bulk have fallen from an average of about $50 per tablet to about $15, and the average price of generics has dropped from about $60 to $40 per tablet.
“I think it’s probably more of a general trend than we’ve seen with a lot of things in the last few years,” said Averills co-author and professor of medicine at the university.
The average price for generics for all types of drugs in the United States has fallen to about twice the average cost of generic drugs, and prices for those drugs that are sold in bulk are declining, too.
In the last two years, the number of generic drug approvals has jumped by more than 25 percent, according to the U.N. Food and Agriculture Organization (FAO).
But the price drop is happening at the expense of innovation.
While the FDA has said that generic drugs must have a price of at least $150 for the average American consumer, Averilla said that the average generic drug currently costs less than $80 per tablet, and most generics are between $80 and $120 per tablet or more.
“You’ve got people going, ‘Wow, I’m really excited about this,'” said Avernill.
“If they’re not paying that price, they’re paying more than they need to,” he added.
Averill said that he has seen this trend firsthand, particularly during the height of the drug price wars in the early 2000s.
“There were a lot more people who were buying drugs for $150 per tablet and not doing anything, not paying attention, and then there was this sudden influx of generico drugs that were priced at $300,” he said.
“It’s kind of like a perfect storm, because you’re getting more of this at the same time you’re also seeing prices for the generico generics falling.”
Averills research found that the generic drug market grew from around $4 billion in 2000 to more than $11 billion in 2015.
“That’s when the cost of the generics came down dramatically,” he noted.
Aversill said the trend has been accelerated since the FDA announced its plans to ease regulations for generic drugs on Tuesday, July 23.
The agency announced a set of new rules that would allow generics to be sold in grocery stores and pharmacies without prescription caps.
“This is a huge step in the right direction,” said James Cawley, CEO of Cawleys Pharmaceuticals, which makes generics.
“There’s going to be more innovation going on, and you’ll be seeing generics that are much more affordable and accessible.”
The FDA said it plans to announce a final rule in the second half of 2018 that will expand the availability of generic drugs, including to people who are not already covered by insurance.